ESE industrial profits slumped in the first two months of 2012, according to official figures out yesterday, increasing fears that the world’s second-largest economy may be faltering.
Across the sector profits fell 5.2 per cent compared with the same period of 2011, raising calls for further policy loosening to support the economy.
The biggest losses were seen in ferrous metal processing, with profits down 94 per cent, according to the figures from the National Bureau of Statistics.
The chemical industries and car manufacturing also suffered, with profits falling 28.8 per cent and 6.5 per cent respectively.
“The government needs to cut interest rates and push investment projects in the coming months,” said economist Zhiwei Zhang from Nomura.
Analysis from UBS suggests that Chinese growth has further to fall and will reach its lowest point in the first quarter of 2012, before rebounding later in the year.